Current Earnings Strength vs AI Disruption

S&P 500 earnings growth for 4Q 2025 is tracking at +12%, showing resilience despite intensifying debates over long-term AI disruption. Hyperscaler capex is surging to an estimated $660 billion for 2026, increasingly crowding out share buybacks.

Key Takeaways

• 1.4Q 2025 earnings show broad-based strength with S&P 500 EPS tracking at +12% year/year, exceeding initial consensus forecasts.
• 2.Hyperscaler capex estimates for 2026 have surged to $660 billion, a 22% increase from the start of the season, impacting corporate buyback volumes.
• 3.A disconnect exists between near-term fundamental strength and investor fears of long-term AI disruption, specifically in software stocks which have plunged 24% despite rising earnings estimates.

Table of Contents

• Takeaways from the 4Q earnings season
• Earnings season summary
• S&P 500 earnings and return forecasts
• Biggest stock movers this week
• Sentiment and flows
• Economic growth
• Interest rates and financial conditions
• Market breadth and concentration
• Correlation and volatility
• IPO Barometer and mutual fund performance
• Earnings growth
• Valuations
• Sector returns, earnings, and valuations
• Thematic baskets
• Factors
• Goldman Sachs global macro research cross-asset forecasts

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